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### Viewing cable 06SAOPAULO316, GERALDO ALCKMIN: TWO ADVISORS TALK ABOUT HOW HE BEAT SERRA,

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06SAOPAULO316 | 2006-03-22 17:36 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Sao Paulo

`

    VZCZCXRO8410
    OO RUEHRG
    DE RUEHSO #0316/01 0811736
    ZNR UUUUU ZZH
    O 221736Z MAR 06
    FM AMCONSUL SAO PAULO
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 4740
    INFO RUEHBR/AMEMBASSY BRASILIA 5893
    RUEHBU/AMEMBASSY BUENOS AIRES 2113
    RUEHAC/AMEMBASSY ASUNCION 2461
    RUEHCV/AMEMBASSY CARACAS 0219
    RUEHMN/AMEMBASSY MONTEVIDEO 1876
    RUEHLP/AMEMBASSY LA PAZ 2663
    RUEHSG/AMEMBASSY SANTIAGO 1623
    RUEHRI/AMCONSUL RIO DE JANEIRO 6927
    RUEHRG/AMCONSUL RECIFE 2789
    RHEHNSC/NSC WASHDC
    RHMFISS/CDR USSOUTHCOM MIAMI FL
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/USDOC WASHDC 2333
    RUEHC/DEPT OF LABOR WASHDC

` `

    UNCLAS SECTION 01 OF 05 SAO PAULO 000316

    SIPDIS

    SENSITIVE
    SIPDIS

    NSC FOR CRONIN
    STATE PASS USTR FOR SULLIVAN/LEZNY
    DEPT OF TREASURY FOR FPARODI
    USDOC FOR 332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWARD
    USDOC ALSO FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON
    STATE PASS EXIMBANK
    STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE
    DOL FOR ILAB MMITTELHAUSER

    E.O. 12958: N/A
    TAGS: PGOV PREL PINR ECON ETRD BR
    SUBJECT: GERALDO ALCKMIN: TWO ADVISORS TALK ABOUT HOW HE BEAT SERRA,
    HOW HE WILL CAMPAIGN AGAINST LULA

    REF: (A) SAO PAULO 278; (B) SAO PAULO 206; (C) SAO PAULO 73

    SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY.

    -------
    SUMMARY
    -------

    ¶1. (SBU) The March 14 announcement by the leadership of the
    opposition Brazilian Social Democracy Party (PSDB) of the nomination
    of Sao Paulo Governor Geraldo Alckmin for President (ref A)
    represented the culmination of a two-month blitzkrieg by Alckmin's
    forces that apparently took party chieftains and supporters of Sao
    Paulo Mayor Jose Serra by surprise.  Everyone, it seems, knew
    Alckmin was an able politician and administrator, but few imagined
    he had the tenacity to prevail in the face of tepid poll numbers, a
    better-known opponent, and the perceived opposition of the party
    leadership's, especially former president Fernando Henrique Cardoso
    (FHC).  Post spoke with two of Alckmin's intimates about how Alckmin
    won the battle for the nomination and what his strategy is for
    defeating President Lula da Silva in the October election.  People
    who know him emphasize that Alckmin is a highly disciplined and
    focused individual who values competence, pragmatism, and
    efficiency.  Beneath the bland exterior there is fiery
    determination.  If Serra and his supporters underestimated him, Lula
    and his Workers' Party (PT) are not likely to make the same mistake.
     End Summary.

    --------------------
    THE CAMPAIGN MANAGER
    --------------------

    ¶2. (SBU) CG and Poloffs met March 20 with Joao Carlos de Souza
    Meirelles, Sao Paulo State Secretary for Science, Technology, and
    Economic Development.  Meirelles, who served 1998-2002 as state
    Secretary of Agriculture under both the late Governor Mario Covas

    SIPDIS
    and his successor Alckmin, managed Alckmin's 2002 re-election
    campaign for Governor and is now planning to leave his job to devote
    his full attention to the presidential campaign.  He noted that
    until March 31, the day of his resignation, Alckmin will remain
    focused on state government, getting projects and initiatives ready
    to turn over to his successor, Lieutenant Governor Claudio Governor
    of the Liberal Front Party (PFL).  On Sunday, Alckmin inaugurated
    another phase of the sanitation/flood control project for the Tiete
    River, which runs through the city of Sao Paulo and is prone to
    flooding during heavy rains; on Monday, he cut the ribbon at the
    restoration of the historic Luz train station and opening of the
    Museum of the Portuguese Language in downtown Sao Paulo.  On March
    31 he plans to inaugurate work on a new subway line on Avenida
    Paulista in the business district.

    ---------
    ALLIANCES
    ---------

    ¶3.  (SBU) April and May, Meirelles continued, will be devoted to
    developing terms of reference for large national themes.  Each theme
    will have a working group.  Advisors will also identify the specific
    problems of each state as well as regional problems.  Then there is
    much work to be done on alliances.  The priority is to talk to Rio
    de Janeiro Mayor Cesar Maia, who has declared himself a
    pre-candidate for President for the PFL, but who Meirelles thinks is
    not really interested in running.  According to press reports,
    Alckmin hopes to persuade him to run instead for Governor of Rio de
    Janeiro state.  The PFL was allied electorally with the PSDB in
    FHC's successful runs in 1994 and 1998, and the two parties are
    allied in a number of states, including Sao Paulo.  Meirelles said

    SAO PAULO 00000316  002 OF 005

    the PSDB and PFL need to find a common denominator that will enable
    them not only to campaign together successfully, but to govern
    together; in his view, a great weakness of the Lula government has
    been its inability to hold its electoral coalition together to pass
    legislation.  Another possible ally is the Popular Socialist Party
    (PPS); its president, Roberto Freire, is planning to run for
    President, but not with any hope of winning, only to help some of
    the party's candidates for Federal Deputy.

    -------------
    THE NORTHEAST
    -------------

    ¶4.  (SBU) CG asked how Alckmin would do against Lula in the
    all-important northeastern region.  Meirelles rejoined that Lula was
    strong in the northeast - though the PT was not - because he was
    born there and because he gave people money (i.e., government
    handouts), but he didn't create jobs.  There are people in their
    seventh year of receiving payments from the "Bolsa Familia" program,
    which was created by FHC but expanded by Lula.  Bolsa Familia should
    be a "port of entry" for the poor to a better life, not a dead-end
    welfare program.  The region needs massive investment in
    infrastructure and human capital, and financial investment as well,
    which Lula has not provided.  Although Alckmin is not well known in
    the northeast, Meirelles said, the PSDB has a presence there.  Its
    president, Senator Tasso Jereissati, is from Ceara, and the state's
    Governor, Lucio Alcantara, is PSDB.  The party also has a number of
    federal and state deputies in that state.  In Paraiba, there is
    Governor Cassio Cunha Lima, a strong "alckmista."  The PSDB is weak
    in Pernambuco, Meirelles acknowledged, but it has an alliance with
    Governor Jarbas Vasconcelos of the Brazilian Democratic Movement
    Party (PMDB).

    ¶5.  (SBU) Asked about the PMDB's likely impact on the campaign,
    Meirelles opined that if Rio de Janeiro former Governor Anthony
    Garotinho runs, he will take votes away from Lula because of his
    populist positions.  If not, and if Lula does not choose a running
    mate from the PMDB, the party will ally with the PSDB in some
    states, though probably not in Sao Paulo.  (NOTE: The PMDB allied
    with the PSDB in the 2002 presidential election but eventually
    joined President Lula's governing coalition.  The party remains
    deeply divided between pro- and anti-Lula factions, and will not
    decide until its convention in June whether or not to run a
    candidate for President.  Garotinho just won the party's "informal"
    primary.  In Sao Paulo state, there has been some speculation that
    PMDB former Governor Orestes Quercia may prefer to run for a Senate
    seat rather than for Governor, and that the PSDB may support him in
    return for PMDB support in other races, but this possibility remains
    hypothetical at this stage.  END NOTE.)

    ------------------------
    FOREIGN POLICY AND TRADE
    ------------------------

    ¶6.  (SBU) CG asked about Alckmin's policy with respect to bilateral
    relations with the United States and his approach to FTAA and
    Mercosul.  Meirelles said an Alckmin administration would want to
    sit down and have a very special, specific dialogue with the United
    States to develop, step-by-step, over the long-term, a pragmatic
    bilateral partnership without undermining either FTAA or Mercosul.
    Right now, everyone in the region wants to negotiate a bilateral
    trade agreement with the United States, ignoring their neighbors,
    hurting regional integration, he opined.  Mercosul was
    dysfunctional, as demonstrated by Argentina's problems with beef.
    South America needs economic development and growth.  Relations with
    the EU "have been badly conducted by all of us."  Brazil would also
    like to have a better quality of discussions with the United States

    SAO PAULO 00000316  003 OF 005

    in the WTO.  There are certain gestures the U.S. could make to
    facilitate such discussions, but "the U.S. wants gestures from us
    too."  "The planet called China" is now everyone's central focus;
    Brazil and the U.S. could work together on that as well, and on
    helping Africa.  Meirelles clearly envisioned a closer and more
    collaborative bilateral relationship.

    -----------
    THE INSIDER
    -----------

    ¶7.  (SBU) Poloff and Pol Assistant met March 21 with State Deputy
    Edson Aparecido dos Santos, an Alckmin insider who coordinated the
    campaign for the nomination.  Aparecido, who is the government's
    leader in the state legislature, said he was planning to run for
    Federal Deputy in this year's election.  Obviously in high spirits,
    he characterized Alckmin's nomination as a "great victory."  Asked
    how it came about, he said that he, along with Meirelles, Federal
    Deputy Silvio Torres, and State Housing Secretary Emanuel Fernandes
    had lobbied for Alckmin first among PSDB State and Federal Deputies,
    and then among Governors and state party chairmen, gradually
    building a strong base of support.  They had pitched Alckmin as the
    "natural" candidate, the political heir of party founder Mario
    Covas, with six years as Covas's Lieutenant Governor and six years
    as Governor with an impressive 69 percent job approval rating, low
    negatives, and a solid record as an administrator.  Lula's poor
    showing in the polls in late 2005 had helped, showing he was
    vulnerable.  Ultimately, the party's leadership had no choice.  From
    Aparecido's perspective, their choice of Alckmin reflected the
    electorate's clear call for something new: a Lula-Alckmin race was
    the way of the future, whereas a Lula-Serra race - a repeat of 2002
    - would have been like looking through the rear-view mirror.  A
    Lula-Serra race would have been bloody as well - extremely negative
    all around - but the Lula-Alckmin race would not be, he thought.
    After the nomination was announced, Lula was quick to praise Alckmin
    and state that he should not be underestimated.

    ¶8.  (SBU) A PSDB alliance with the PFL is already pretty much a done
    deal, Aparecido said.  Alckmin is going to persuade Cesar Maia to
    run for Governor of Rio de Janeiro instead of for President.  As an
    added bonus, Maia's Vice Mayor, who would succeed him, is from the
    PSDB.  This would make a fair trade, if, as widely rumored, Jose
    Serra resigns as Mayor to run for Governor of Sao Paulo, leaving the
    Mayorship to PFL Vice-Mayor Gilberto Kassab.  (NOTE: A "Datafolha"
    poll published March 20 suggested Serra could win the Governor's
    race in the first round, handily defeating possible PMDB candidate
    Orestes Quercia and either PT candidate, Senator Aloisio Mercadante
    or former Sao Paulo Mayor Marta Suplicy.  If he doesn't run, neither
    of the other likely PSDB candidates, City Councilman Jose Anibal and
    former Education Minister Paulo Renato, appears likely to break out
    of single digits.  According to press reports, Alckmin wants to have
    strong gubernatorial allies in the three key states of Sao Paulo,
    Rio de Janeiro, and Minas Gerais, where Aecio Neves looks like a
    shoo-in for re-election.  END NOTE.)  The PSDB, he went on, has also
    had good conversations with the PPS, and an alliance is likely.
    There have been preliminary conversations as well with the Green
    Party (PV) and the Democratic Labor Party (PDT).

    -------------------
    HOW TO TAKE ON LULA
    -------------------

    ¶9.  (SBU) Political scandal, Aparecido said, had destroyed the
    leadership of Lula's party, ousted his "Prime Minister," Jose
    Dirceu, and was now damaging his Finance Minister, Antonio Palocci.
    The only reason Lula himself had not been more badly damaged was
    that, because of the scope of the "mensalao" (bribery scheme),

    SAO PAULO 00000316  004 OF 005

    Congress had lacked the moral authority to pursue impeachment, and
    he had had time to recover.  But Lula was not a political operator
    or leader, but rather a symbol.  Alckmin was not going to attack
    that symbol, though inevitably he would raise the corruption issue.
    Lula had lost the middle-class vote because of the scandal.
    Aparecido was confident that voters would discover for themselves
    how little Lula had done for the country by "playing Robin Hood in
    reverse," funneling taxpayers' money to the already wealthy.  He was
    also scathing about Lula's social programs.  "There was a program,
    begun under Fernando Henrique, called 'Bolsa Escola.'  Poor families
    could receive stipends from the state, so long as the parents sent
    their children to school and met other conditions.  When Lula and
    the PT came to power, they renamed the program 'Bolsa Familia' and
    removed the conditions and requirements so more families could
    qualify and they could get more political credit for it." Alckmin,
    he said, was going to put to the voters a program showing how, in
    his first weeks in office in January 2007, he would propose
    legislation for labor reform, tax and budget reform, social security
    reform, and political reform.  With the right alliances, he could
    pass them.

    ¶10.  (SBU) Tasso Jereissati will be the campaign's national
    coordinator, Aparecido said, and Joao Carlos Meirelles will prepare
    the government program, as he did in the 2002 gubernatorial
    campaign.  Other leadership positions have not yet been determined.
    Aparecido himself will help out in Sao Paulo to the extent possible
    consistent with running his own campaign for Congress.  The foreign
    policy platform will be developed by FHC's old team, including
    former Ambassador to the U.S. Rubens Barbosa, former Foreign
    Minister Celso Lafer, and former Ambassador to France Sergio Amaral,
    though they won't necessarily get their old jobs back.  On the
    economic side, Alckmin has been listening to proponents of all
    schools of economic thought (e.g., government interventionist,
    monetarist, developmentalist), but it is not yet clear who will
    become the campaign's leading influences on economic issues.

    ¶11. (SBU) The internal competition for the nomination, Aparecido
    concluded, had been good for the PSDB, and especially good for
    Geraldo Alckmin, who had emerged much stronger.  It had demonstrated
    that a small coterie of party bosses could no longer work their will
    absent solid support from the party's base.  "Even Fernando Henrique
    can't do it.  The only one who could do it was Mario Covas.  If a
    situation like this ever arises again, we'll have a much more
    inclusive, democratic process."

    -------
    COMMENT
    -------

    ¶12. (SBU) The words used most often by both Meirelles and Aparecido
    to describe Alckmin are "disciplined" and "focused."  When the
    Governor himself talks about government, he uses words like
    "efficiency" and "competence."  Much of the mainstream press is
    already characterizing him as "the anti-Lula," and one leading daily
    depicted the campaign as what happens "When the King of Talk Meets
    the Notebook Man."  We can attest to the fact that Alckmin is very
    reserved in person; unlike many politicians, he is much more a
    listener than a talker.  He is also very much a policy wonk, having
    been in government since the age of 19, when he was elected to the
    City Council of his home town of Pindamonhangaba in the interior of
    Sao Paulo state.  To some, this makes him come across as boring:
    some time ago, one clever political commentator gave him the
    humorous, albeit virtually untranslatable, sobriquet of "picole de
    chuchu" (bland green vegetable on a stick), and it has stuck, much
    to cartoonists' delight.  But mere blandness and industriousness
    would not have defeated Serra; it is now evident that Alckmin also
    has fire in his belly.  As one Lula advisor reportedly commented,

    SAO PAULO 00000316  005 OF 005

    "he's a picole de chuchu with a peppery taste."  (NOTE:  A "picole"
    is a popsicle.  A "chuchu" is a chayote, also known as a vegetable
    pear or a mango squash.  END NOTE.)  It looks like Lula will have
    his hands full with him.  End Comment.

    ¶13. (U) This cable was coordinated/cleared with Embassy Brasilia.

    MCMULLEN

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